Reformulated balance sheets and income statements for General Mills's 2010 fiscal year are in Exhibits 10.5 and

Question:

Reformulated balance sheets and income statements for General Mills's 2010 fiscal year are in Exhibits 10.5 and 10.11 in Chapter 10. The firm's 656.5 million outstanding shares traded at $36 each at the time the 2010 statements were published. From these financial statements, calculate the following for fiscal year 2010:

a. Free cash flow.

b. Residual operating income based on beginning-of-year balance sheet numbers. Use a required return for operations of 5.1 percent (the number in Box 14.2).

c. Enterprise price-to-book.

Do you feel comfortable using the 5.1 percent required return from Box 14.2?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...